Client Alerts

The Tax Cuts and Jobs Act (the new Tax Act) may make sexual harassment settlements more expensive for employers. Prior to tax reform, the Tax Code had permitted companies to take a business deduction for the costs of obtaining sexual harassment settlement agreements. The new act prohibits that deduction if sexual harassment or sexual abuse settlements include non-disclosure provisions.

In one of the most watched Trade Secret Misappropriation cases of the century—which has been billed as an “epic” lawsuit, one of the “juiciest” trade secret cases ever, and one of the “highest profile court battles in Silicon Valley history”—Waymo and Uber have finally reached a settlement in the case that has raged on between them for the past year. As part of the settlement, Waymo (a subsidiary of Google’s parent company) will receive .34 percent of Uber’s equity. If that does not sound like much, considering that Uber is valued at $72 billion, it is. This settlement translates to approximately $244 million. One publication reports that were this amount won in a jury verdict, it would have been one of the highest trade secret jury verdicts in the United States in the past decade.

You may not have been paying attention to the upcoming GDPR (General Data Protection Regulation) deadline on May 25^th, thinking that it does not apply to your company, but it may.

In a previous Client Alert, we provided information on the growing trends in telemedicine.  In 2017, that trend continued, as 34 states and the District of Columbia passed 63 pieces of telemedicine legislation.  Nine states passed telehealth legislation mostly easing restitution.  Nebraska, Washington, Tennessee, and Maine passed legislation to join the Interstate Medical Licensure Compact, and 22 states now support this effort to streamline physicians licensing in multiple states. Two other states have delayed implementation and four more--including Michigan—still have legislation pending.

The Department of Labor (“DOL”) has announced that the revised claim and appeal procedure regulations under the Employment Retirement Income Security Act of 1974 (“ERISA”) for employee benefit plans providing disability benefits will soon take effect. The enhanced rules primarily adopt procedural protections and safeguards for disability benefit claims that are currently applicable to claims for group health benefits pursuant to the Patient Protection and Affordable Care Act. As a result, plan administrators of employee benefit plans subject to ERISA will need to quickly act to ensure compliance with the enhanced rules.

How the Sessions Memo Affects the Cannabis Industry in Michigan and Beyond

As the cannabis industry continues to grow across the nation (marijuana use is legal in some fashion in approximately 29 states already), the general public and those with vested business interests in the industry itself are anxious to see whether that growth will either continue or pause in the Trump Era. In Michigan, we are tracking the possibilities of recreational marijuana legalization as early as 2019, following an anticipated vote in the November 2018 general election. That anxiousness is even more pronounced given a recent decision from United States Attorney General Jeff Sessions, who released a memo on January 4, 2018 (the “Sessions Memo”) rescinding federal guidance that had reassured states that they would not be punished for legalizing marijuana. Politics aside, that rescission has left the public and the industry with more questions than answers. This article attempts to provide a critical update on the status of this developing topic and explores the potential impact on the Cannabis industry in Michigan and beyond.

Effective January 1, 2018, the Bipartisan Budget Act of 2015 (the “Budget Act”) implements new rules regarding audits of partnerships. These rules also apply to limited liability companies taxed as partnerships. For partnership tax years beginning in 2018, the Budget Act now imposes an entity level tax collected on the partnership itself to the extent the partnership is audited and the Internal Revenue Service makes an adjustment and determines that there is a tax deficiency in any audit. Prior to application of the Budget Act, audits were normally assessed and paid at the partner level by the partners rather than at the partnership level by the partnership.

In a Letter to State Surveyors, the Centers for Medicare & Medicaid Services (“CMS”) has clarified its position on texting patient information, and more notably Orders, among members of a patient’s care team. In a nutshell: Don’t Do It!

The Affordable Care Act (ACA) contraceptive mandate, contained in 2012 agency guidelines fleshing out the ACA “essential health benefit” pertaining to women’s health and preventive services, required most group health plans to provide contraceptive coverage with no cost-sharing, unless the plan sponsor fell within a religious exemption. On October 6, 2017, the Trump Administration issued immediately effective “Interim Final Rules” (the “2017 IFRs”) that “rolled back” that mandate.

Now, however, in two of several lawsuits challenging the new rules, federal courts in California and Pennsylvania have entered nationwide injunctions barring the Administration from enforcing the 2017 IFRs.

This E-News Alert briefly summarizes some of the employee benefits provisions in the Tax Cuts and Jobs Act (the “TCJA”) – i.e. the tax reform legislation – recently passed by Congress and expected to be signed by the President into law. Please contact the author of this E-News alert, any member of the Butzel Long employee benefits practice group, or your regular Butzel Long attorney contact for more information.

Congress just passed the Tax Cuts and Jobs Act (the “Act”) that President Trump is expected to sign in the coming days. The Act provides for changes to the tax code that will have far reaching effects for both individuals and businesses.

On Friday, December 15, 2017, Republican leaders in Washington released the final version of their proposal for tax reform. Within a few hours, two Republican senators, who had both opposed previous versions, announced that they were prepared to vote in favor of the final bill. Both houses have now passed the legislation and it is heading to President Trump’s desk for his signature. But what will it mean for tax-exempt nonprofit organizations once it becomes law?

Effective January 1, 2018 the minimum wage in Michigan will increase to $9.25 per hour. This is the result of the graduated increases in the state minimum wage enacted in 2014 by the Michigan Legislature. The minimum wage for tipped employees also increases on January 1 to $3.52 per hour (provided that tips per hour average at least $5.79 since tipped employees must make at least minimum wage when tips are included).

Headline stories from Hollywood to our nation’s capital – with new revelations virtually daily – are setting off alarm bells for employers throughout the country, and for good reason. It is quite likely that the tremendous media attention on the issue of sexual harassment will result in an increase in complaints against employers and potential claims. That, in turn, certainly raises the specter of additional liabilities for employers. But rather than solely viewing the situation as a threat, employers can instead use the current discussion about sexual harassment as an opportunity – an opportunity to ensure their policies are up to date and appropriate, to better educate and train their supervisors and managers, and to display, and in some cases create, a workplace that demonstrates care for its employees--which reflects a non-threatening, comfortable environment, and which promptly and effectively investigates and resolves complaints.

Waymo, Google’s self-driving car spin-off, publically took the lead in the race to bring Level 4 autonomous vehicles to the public on November 8^th when CEO John Krafcik showed a Web Summit conference audience video of modified Chrysler Pacificas moving on public roads in the greater Phoenix area without human drivers. 

On October 31, 2017, the Detroit City Council passed comprehensive amendments to Chapter 22 of the Detroit City Code, Handling of Solid Waste and Prevention of Illegal Dumping, imposing stringent fugitive dust mitigation requirements on owners and operators of Bulk Solid Material Facilities. 

Auto industry groups joined together this week in an unusual display of unity to keep the Trump administration from drastically changing or withdrawing from the North American Free Trade Agreement (NAFTA).  The Motor and Equipment Manufacturers Association (MEMA), and the American International Automobile Dealers Association (AIADA), joined with several Original Equipment Manufacturers (OEM) trade associations (Alliance of Automobile Manufacturers (AAM), the Association of Global Manufacturers (AGM), and the American Automotive Policy Council (AAPC)).  On October 24, 2017, they launched the “Driving American Jobs” coalition, a grass roots effort enlisting voters to tell Washington:  “Don’t change the game in the middle of a comeback.”

Recent IRS Development

The world of retirement plan maintenance was upended last year when the Internal Revenue Service announced the near-abandonment of its determination letter program for ongoing individually designed qualified retirement plans. A favorable determination letter from the IRS has for several generations been the accepted indicator of a plan’s tax qualification.  For individually designed plans, new or updated letters will no longer be obtainable from the government, and the reliance value of the last letter received by a plan will begin to erode over time. For both tax law compliance and for business reasons, plan sponsors must now find a way to achieve continued tax-qualified status for their plans, and a means of documenting compliance, lacking IRS ruling letters.

President Trump summarized the net result of two executive orders he recently signed in a Cabinet meeting on October 16, 2017, saying that there is “no such thing as Obamacare anymore."

Michigan House Bill 4755, quietly introduced this past June by State Representative Lucido (R-Washington Township), seeks to (i) require notice of the requirement of a noncompete to job applicants, and (ii) outright ban noncompetes for “low-wage” employees.